Tuesday, March 24, 2009

With the close of the World Baseball Classic (congrats to Japan) and with baseball’s opening day looming, nearly every sports website is aggressively promoting their own web service to manage your Fantasy Baseball league. So today we celebrate some of the men who have been credited with the creation of the phenomenon that is now called Fantasy Baseball.

Daniel Okrent, Robert Sklar, Steve Wulf and Glen Waggoner are the four more well-known names associated with the first such league. The four men were sportswriters and friends who would often engage in the male-bonding ritual of endlessly discussing their favorite ballplayers (From my experience, women LOVE it when you do this…having trouble with the ladies? This can’t miss!). The really fun part about discussions like this is that, without any way to quantify the discussions, there was no way to discern who the “winner” was. So these four gentlemen decided to come up with a way to try to quantify each person’s stock of knowledge in order to best measure who was really the most knowledgeable sports fan.

Their idea was to have each person in the discussion put their money where their mouth was. Instead of discussing who the best players were, each member would be challenged to put together a team, like a real General Manager of a baseball team, by bidding on the best players. Each team was given a cap of money they could spend ($260 in the original version of the game). Using a relatively simple ranking system the real world performances of the players on an individual’s team would be measured against the rival teams’ performances, and at the season’s end a winner would be crowned.

The first such competition occurred in 1980 and the league was named the Rotisserie League, after the restaurant at which the league members would typically meet, La Rotisserie Francaise. Rotisserie Baseball (since renamed Fantasy Baseball) was born.

Over the last three decades, the game has grown phenomenally, and many variants on the basic format have emerged. The internet was a major driver of growth for the game, as the compilation of statistics and day-to-day management of the league was made exponentially simpler. Estimates vary, but most seem to indicate that the audience for Fantasy Baseball has swelled to over 30 million players in the U.S. and Canada as of last year. The websites that offer to manage your leagues and compile the necessary statistics typically charge around $100 per league to do so, and leagues are often no more than 10-20 teams. As you can see, this represents a staggering amount of revenue for the websites which provide such services. Estimates of this revenue are also varied, but typically are in the neighborhood of $1.5 billion per year – for baseball leagues alone. With the popularity of Fantasy Baseball, variants have sprung up for every sport imaginable, with Fantasy Football being far and away the most popular. Player volume and revenue for Fantasy Football have surpassed those of baseball, and estimates of revenues from football leagues are upwards of $3 billion.

There are a few problems associated with this phenomenon. Purists of the sports involved like to complain that it is changing fans and the way that they root for the sport, causing them to cheer for individual players instead of teams. This may or may not be true, but it is difficult to argue that it is a problem. Fan interest in the major sports has never been higher, and those involved in leagues will often tell you that it has renewed or increased their interest in the sports that they loved as children. As an avid Fantasy sports player and sports fan in general, I can support this latter view.

Like most intellectual property, protecting ownership of the idea turned out to be tricky. Even if the founders had been able to patent the original idea, the thousands of varients that have since emerged would have eroded the property rights of these writers. Consequently, the founders are not able to claim part of the profits from this incredible surge in popularity. But they did not go away penniless. A series of books about the game and specifically about the Rotisserie League itself was published. In the days before the internet, these books were the main source of information about how to play the game and some basic strategic elements crucial for being a winning Rotisserie owner. As a result, these books were relatively popular and generated some wealth or these founders.

Other attempts to stake a claim to some of the revenues being generated through fantasy sports have also been unsuccessful. For example, Major League Baseball recently lost a lawsuit, seeking compensation from the websites that use their statistics for providing support to Fantasy leagues. (Somehow, this lawsuit made it all the way to the Supreme Court!)

Fantasy sports are another example of a relatively simple idea which found a niche and then combined with technology to become a phenomenon. Tremendous wealth opportunities are created for the websites who manage the game for its players, for the people who write about the sports in question, and for the players and owners in the sport who experience a surge in the popularity of the sport. For the creation of such wealth, Daniel Okrent, Robert Sklar, Steve Wulf, Glen Waggoner and any of the other contributing members of the original Rotisserie League should consider themselves Heroes of Capitalism.

4 comments:

As a lady who has loved all of these guys and married one of them (Sklar) let me just say that these guys are most accurately the heroes of socialism and/or the goats of capitalism. The inventors of Rotisserie baseball, which has now, according to the journalist from Wall Street Journal who wrote a book on fantasy leagues, ancillary annual income in the billion dollar range. These lovely guys made no money, make no money, failed in the one entrepeneurial task of buying an actual minor league team ( The Holyoke MIllers for sale in 1974 for 95,000$). But they love baseball and indeed that is appealing to ladies.

As a lady who has loved all of these guys and married one of them (Sklar) let me just say that these guys are most accurately the heroes of socialism and/or the goats of capitalism. The inventors of Rotisserie baseball, which has now, according to the journalist from Wall Street Journal who wrote a book on fantasy leagues, ancillary annual income in the billion dollar range. These lovely guys made no money, make no money, failed in the one entrepeneurial task of buying an actual minor league team ( The Holyoke MIllers for sale in 1974 for 95,000$). But they love baseball and indeed that is appealing to ladies.

I'm a single dad of 2 age 2 and 5. I find your site so interesting and helpful. I hope I have much time each day to drop by and check your site for recent post. By the way I really appreciate the effort for sharing this.. Thank you..

Can you please help save our league? We are Silicon Gulch Rotisserie League; we were the fifth league in the country to register with you. After 30 years, the triad that controls our league has decided that we should allow players lost to the AL to be used in our previously NL-only league. Sadly, the leader quotes the "Founding Fathers" saying you would approve a rule change like this. Are you still listening to this blog? Can you help?